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Landlords and the Deregulation Act 2015

Author: Caroline Walton

If you are a landlord of residential property who has let the property out on an Assured Shorthold Tenancy (AST) then you may need to take action before 23 June 2015 to avoid financial penalties and the possibility of being prevented from recovering possession of the property from the tenant.

Since 6 April 2007, it has been mandatory for a landlord to protect a deposit obtained from the tenant on the creation of an AST in a tenancy deposit scheme (TDS).  This obligation has been held by the Courts to apply where the fixed term has expired and the tenant has remained in occupation of the property and continues to pay rent under the periodic tenancy.  The Courts have held that the periodic tenancy which arises is a "new tenancy" and the landlord must join a TDS if they are holding a deposit and continue to hold it after the creation of the "new tenancy".

Section 32 of the Deregulation Act 2015 which came into force on 26 March 2015 now provides that where all of the following are satisfied:

  • Before 6 April 2007, a tenancy deposit has been received by a landlord in connection with a fixed term AST;
  • On or after 6 April 2007, a periodic AST is deemed to have arisen at the end of the fixed term AST;
  • On the coming to an end of the fixed term AST, all or part of the deposit paid in connection with the fixed term tenancy is held in connection with the periodic tenancy;
  • The landlord has complied with the obligation to secure the deposit in a TDS.
the requirements regarding securing the deposit in a TDS and the provision of prescribed information will be satisifed if they are complied with before the end of 90 days beginning on 26 March 2015.

If you require any advice in connection with the above please contact Caroline Walton either by telephone on 01306 502215 or by email c.walton@downslaw.co.uk.
Posted on 15/05/2015 by Pam Bowring

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